Acquired immunodeficiency syndrome (AIDS) is characterized by the profound loss of ability to respond to environmental antigens as well as the development of Kaposi's sarcoma. We have studied the percentage of T-cell subsets in patients with the disease and patients at risk for the disease. In a prospective study, we evaluated the total numbers of T4 positive lymphocytes in 86 HTLV-III antibody-positive AIDS-free homosexual men, 19 of whom developed AIDS between June 1982 and 1985. In evaluation of these T-cell subsets, it was found that the highest degree of correlation with development of the disease was with low numbers of T4 positive cells at the time that the studies were initiated. In skin biopsies from patients with Kaposi's sarcoma, AIDS, or individuals who were HTLV-III sero-positive, we have identified the HTLV-III retrovirus in Langerhan cells. Positive biopsies were found in 7 of 40 individuals with Kaposi's sarcoma and/or AIDS-related complex. No positive biopsies were seen in patients with opportunistic infections. In studies of the early events of binding of the HTLV-III retrovirus to T-cells, we have determined that the epitope defined by a monoclonal antibody detecting the T4A antigen on the T4 molecule is the specific receptor for HTLV-III binding. Also involved in the binding is the HLA-DR molecule, while other products of the HLA-D region appear not to be involved in HTLV-III binding. Peripheral blood monocytes, as well as cell lines with monocyte function and characteristics, have been infected with HTLV-III. These monocytes bear the HLA-DR antigen as well as a molecule detected by the OKT4A antibody. Other antibodies detecting epitopes on the T4 molecule were absent from these cells.